By Charles Power

[Ed Note: In certain circumstances, an employee who has resigned will be able to make an unfair dismissal claim under the Fair Work Act 2009 (Cth) (FW Act).

In simple terms, an employee is dismissed when the termination of employment is at the employer’s initiative. However, termination of employment will also be considered dismissal if the employee was forced to resign because of conduct, or a course of conduct, that the employer engaged in.

Such conduct includes:

• telling an employee that they can either resign or be dismissed;
• failing to adequately respond to issues, such as a bullying or harassment claim, or allowing such issues to continue;
• refusing to pay an employee their entitled overtime;
• making significant changes to an employee’s employment contract without their agreement; and
• requiring an employee to work excessive hours despite the employee complaining that their health is being affected.

In today’s bulletin, Charles Power further explores the circumstances in which an employee who has resigned can make an unfair dismissal claim under the FW Act.

Until next time…]

When can an employee who has resigned make an unfair dismissal claim?

Regardless of whether you intended to cause an employee to resign, if an employee felt forced to resign as a result of your conduct, it will be considered dismissal under the FW Act if:

• resignation was the probable result of the conduct;
• your conduct was the principal contributing factor in the resignation; and
• your conduct resulted directly or consequentially in the termination of the employment.

Example of a resignation that has not been forced:

Annabelle asks her boss for a pay rise. When her boss says no, Annabelle is cross. The next day, she resigns. The reason for the resignation was Anabelle’s boss declining to give her a pay rise. However, ultimately, Annabelle had a choice as to whether or not to resign.

To determine whether your conduct has directly resulted in an employee’s resignation, ask yourself whether:

• had you not taken the action you did, the employee would have remained in the employment relationship; and
• because of your action or conduct, the employee had no effective or real choice but to resign.

If you have only created an environment in which the employee resigns, it will not be enough for the employee to assert that you dismissed them. They need to show that you exerted pressure on them to resign.

Usually, there also needs to have been some sign from the employee showing that they did not wish to resign, but did so against their will.

Case Law

In ABB Engineering Construction Pty Ltd v Doumit (1996), an employee was confronted by allegations of theft. No ultimatum was given to the employee to force his resignation. The employee had no reason to expect that dismissal may have been imminent. The employee said, “Should I resign?”  and the employer responded, “It’s a matter for you.”

The Tribunal accepted that the employee was concerned he would be dismissed, and that the employer’s conduct was a factor in the employee’s decision to resign. However, it did not amount to dismissal for the purposes of unfair dismissal.

In Richman v Quackhouse Pty Ltd t/as Hotel Ingleburn (2012), a manager insulted and humiliated an employee in front of two other workers, calling her a slut. After the incident, the employee went to her supervisor and indicated that she would resign over the incident. The next day, she consulted her doctor and was certified unfit for work. The manager’s brother called her and apologised for his brother’s behaviour. The brother suggested a meeting the next working day for his brother to apologise, and asked the employee not to resign. The employee agreed. The employee also understood the meeting would deal with other outstanding grievances she had previously raised.

The next working day, the meeting did not take place but the manager approached the employee and apologised for his conduct. The following day, the employee resigned on the basis that the employer was “making the incident seem like nothing”. She had had enough of the way she was being treated, having been ignored and punished for the last 6 months, and said she ”was not going to put up with it anymore”.

The Tribunal ruled the employee’s agreement to return to the work site for an apology (and a resolution of the other issues) watered down the impact of the incident to an extent that she was no longer able to argue that she had no option but to resign. If the employee had made her return to work conditional upon a sincere apology and the apology was not given, the employee would have been in a better position to argue she had no choice but to resign.