In Australian workplaces, there are three ways an employment relationship can be brought to an end.
First, employers can terminate the arrangement through either redundancy or dismissal.
Second, employees can resign of their own choice. For this to happen, the resignation must be initiated by the employee and must be truly voluntary.
This distinction is important as workers who resign are unable to lodge claims for unfair dismissal. For the Fair Work Commission to consider such a claim, the termination must happen ‘at the ‘initiative of the employer’.
An exception is where ‘constructive dismissal’ occurs. This happens where the conduct or behaviour of the employer toward the employee is held to be such that the latter effectively had no choice but to resign.
Proving constructive dismissal is difficult as workers who do resign are mostly presumed to have ended their employment voluntarily. To prove constructive dismissal, employer conduct must be especially bad. Further, this conduct must be a likely or probable cause of the resignation.
A common situation where this plays out are resignations which occur ‘in the heat of the moment’. In many cases, such resignations are still deemed to be voluntary. To be considered as constructive dismissal, the law requires that the employee, ‘had no choice but to resign.’ To claim unfair dismissal on this basis, workers must show that they truly had no alternative other than quitting.
For employers, when confronted with a resignation that was unexpected or done under a situation of heat or pressure, is it prudent to wait for some time (preferably at least a day) before confirming with their worker that they truly wish to resign.
In terms of cases, there have been many where the Commission has held that constructive dismissal did not apply even where workers had been subject to poor conduct and may have felt that leaving was their only option.
These include resignations of workers who:
- Had been arguably unjustifiably barred from access to the workplace and then suspended from work and subjected to a disciplinary investigation
- Had resigned after the employer repeatedly and unjustifiably paid wages late and failed to pay superannuation – both of which are prima facie unlawful
- Was held to have been placed on an alleged (by the employee) unjustified performance management plan.
Conversely, an employee was held to have forcibly resigned in another case where they had been underpaid wages by about half for around four months. This contradicts the above case involving late payment of wages/unpaid superannuation.
As these cases demonstrate, proving constructive dismissal can be difficult.
The examples also show that case outcomes can be unpredictable. This is especially so as the Commission is not bound by previous cases unless these have been decided by more than one member.
In light of this, any party who has concerns about this area should seek advice.