These passages from a recent unfair dismissal case discuss the legal issues associated with the concept of constructive dismissal.
“When is a person dismissed?
[10] The meaning of ‘dismissed’ is defined in s.386(1) of the Act which states:
(1) A person has been dismissed if:
(a) the person’s employment with his or her employer has been terminated on
the employer’s initiative; or
(b) the person has resigned from his or her employment, but was forced to do so
because of conduct, or a course of conduct, engaged in by his or her
employer.
[11] In Bupa Aged Care Australia Pty Ltd v Shahin Tavassoli1
(Bupa), a Full Bench of the
Commission examined the relevant authorities as to what constitutes ‘dismissed’ under s.386(1)
which included the following:
(1) There may be a dismissal within the first limb of the definition in s.386(1)(a) where,
although the employee has given an ostensible communication of a resignation, the
resignation is not legally effective because it was expressed in the “heat of the
moment” or when the employee was in a state of emotional stress or mental
confusion such that the employee could not reasonably be understood to be
conveying a real intention to resign. Although “jostling” by the employer may
contribute to the resignation being legally ineffective, employer conduct is not a
necessary element. In this situation if the employer simply treats the ostensible
resignation as terminating the employment rather than clarifying or confirming with
the employee after a reasonable time that the employee genuinely intended to resign,
this may be characterised as a termination of the employment at the initiative of the
employer.
(2) A resignation that is “forced” by conduct or a course of conduct on the part of the
employer will be a dismissal within the second limb of the definition in s.386(1)(b).
The test to be applied here is whether the employer engaged in the conduct with the
intention of bringing the employment to an end or whether termination of the
employment was the probably result of the employer’s conduct such that the
[2023] FWC 2341
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employee had no effective or real choice but to resign. Unlike the situation in (1),
the requisite employer conduct is the essential element.
[12] In Lance Gunther & Michele Daly v B & C Melouney T/A Easts Riverside Holiday Park2
Deputy President Sams noted the following when considering whether the applicant was
dismissed:
- Jurisdiction can only exist where termination of employment at the initiative of the
employer has occurred. ‘Initiative’ is relevantly defined in the New Shorter Oxford
Dictionary as: “the action of initiating something or of taking the first step or the
lead; an act setting a process or chain of events in motion; an independent or
enterprising act.”
- This definition was considered in Mohazab v Dick Smith Electronics Pty Ltd
(Mohazab) where a Full Court of the Industrial Relations Court of Australia said,
‘… a termination of employment at the initiative of the employer may be treated as
a termination in which the action of the employer is the principal contributing factor
which leads to the termination of the employment relationship.’
- In Mohazab, the Full Court also said:
‘In these proceedings it is unnecessary and undesirable to endeavour to formulate
an exhaustive description of what is termination at the initiative of the employer but
plainly an important feature is that the act of the employer results directly or
consequentially in the termination of the employment and the employment
relationship is not voluntarily left by the employee. That is, had the employer not
taken the action it did, the employee would have remained in the employment
relationship.’
- A Full Bench of the AIRC in Stubbs v Austar Entertainment Pty Ltd said, ‘… to
constitute termination at the initiative of the employer the termination must be the
direct or consequential result of ‘some action on the part of the employer intended
to bring the employment to an end and perhaps action which would, on any
reasonable view, probably have that effect …’[Rheinburger v Huxley Marketing, 16
April 1996 per Moore J].
Consideration
[13] Having considered the evidence and submissions, I find that the Applicant was not
dismissed within the meaning set out in s386(1) of the Act, in that he was not dismissed at the
initiative of the Respondent, nor was he forced to resign because of conduct engaged in by the
Respondent.
[2023] FWC 2341
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[14] To the extent the Applicant suggested he was forced to resign, I reject this argument.
There is simply no compelling evidence to support such a finding, including any suggestion
that the resignation was given ‘in the heat of the moment’.
[15] In the hearing, the Applicant focussed on his contention that he was dismissed on 4 May
- His application form and materials filed in support of his application record 4 May as his
dismissal date. The Applicant submitted that “I only initiated that termination by tendering my
resignation with the appropriate notice period of 4 weeks, it was ultimately my employer who
choose to terminate this relationship by dismissing me effective immediately after learning the
reasons I was leaving the company on May 4th 2023 which was 13 days after I had originally
submitted my resignation by email”.
[16] The Applicant gave evidence that Mr Khan told him during the meeting on 4 May that
he was ‘dismissed’. The evidence of the Respondent’s witnesses is that the Applicant was told
to ‘leave now’ but the word ‘dismissed’ was not used. I am satisfied on the evidence that the
Respondent did not dismiss the Applicant, but instead made a lawful and reasonable decision
to not require the Applicant to work the remainder of his notice period. This was reasonable in
circumstances where the Applicant refused to provide a handover of his work to another
employee. It was lawful in that payment in lieu of notice was an option available to the
Respondent under the terms of the Applicant’s employment contract. In other words, he was
not dismissed on 4 May 2023.
[17] The Applicant initially disputed he was paid the balance of his notice period, but in cross
examination he conceded the payment he received was ‘close to’ what he thought he should
have received in his final pay. I am satisfied, based on the payslips in evidence, that the
Applicant was paid out the balance of his notice period.
[18] In summary, there is absolutely no doubt the Applicant resigned of his own accord. He
worked two weeks of his four-week notice period and was paid the balance of his notice period.
This was not a termination at the initiative of the Respondent.
[19] For completeness, if I am wrong and the Applicant was unfairly dismissed on 4 May,
the undisputed fact of the Applicant’s resignation means that his employment would have
ceased at the end of the notice period, being 22 May 2023. In circumstances where the Applicant
did not seek reinstatement, the maximum amount of compensation that could have been
awarded is the pay he would have received between 4 May and 22 May 20233
. Given the
Respondent has already paid the Applicant for this period, he has suffered no compensable loss.
[20] This application is dismissed. ”
Conroy v Optus Administration Pty Ltd [2023] FWC 2341 delivered 18 September 2023 per Dean D