It is not entirely clear to me why there needs to be a doctrine of constructive dismissal in general protections’ law, since the gravamen of them is the taking of adverse action against a person. Thus it is not apparent, at least to me, when a person may be the victim of a constructive dismissal (as that concept is understood in the common law and statutory unfair dismissal laws) and yet it would not constitute adverse action, but there you have it. Perhaps I am becoming academic.
That notwithstanding, here is the concept of constructive dismissal explained by the Federal Court in a recent general protections’ case.
“The significant verb in s 386(1)(b) is ‘forced’. The employee must have resigned because they were ‘forced’ to do so because of the employer’s conduct, or course of conduct. A voluntary resignation cannot constitute a forced resignation.
In Allison v Bega Valley Council (1995) 63 IR 68, the jurisdiction of the NSW IRC to deal with a reinstatement application turned on whether there was a dismissal or, as claimed by Mr Allison, a constructive dismissal. The Commission said, at 72–73:
Although the term “constructive dismissal” is quite commonly used it can deflect attention from the real inquiry. That inquiry should involve an analysis of what occurred. Did the employer behave in such a way so as to render the employer’s conduct the real and effective initiator of the termination of the contract of employment and was this so despite on the face of it the employee appears to have given his or her resignation?
It is obvious that a consideration of these matters must be made on a case-by-case basis and that an attempt to formulate general principles in the absence of particular facts will not assist in the overall determination of this issue.
In order to undertake the necessary analysis it is necessary to look carefully at all the relevant facts. It is necessary to determine whether the actual determination was effectively initiated by the employer or by the employee particularly where the dynamics within a factual situation may change. For example, an employer may demand a resignation with a threat of dismissal, negotiations may then ensue and the employee may ultimately be genuinely pleased with the outcome of those negotiations to the extent that any resultant resignation may be said to be given freely and without any undue influence being brought to bear by the employer.
In Allison, the Commission also referred to R v Prince Alfred College (1979) 46 SAIR 598, a decision of Olsson P (as he then was) in the South Australian Industrial Court in which the applicant, having been formally dismissed, was allowed to substitute his resignation for a dismissal. In discussing the question of constructive dismissal, Olsson P cited the following passage from the judgment of the Employment Appeals Tribunal in Sheffield v Oxford Controls Co Ltd (1979) IRLR 133:
It is plain, we think, that there must exist a principle, exemplified by the four cases to which we have referred, that where an employee resigns and that resignation is determined upon by him because he prefers to resign rather than to be dismissed (the alternative having been expressed to him by the employer in the terms of the threat that if he does not resign he will be dismissed), the mechanics of the resignation do not cause that to be other than a dismissal. The cases do not in terms go further than that. We find the principle to be one of causation. In cases such as that which we have just hypothesised, and those reported, the causation is the threat. It is the existence of the threat which causes the employee to be willing to sign, and to sign, a resignation later or to be willing to give, and to give, the oral resignation. But where that willingness is brought about by other considerations and the actual causation of the resignation is no longer the threat which has been made but is the state of mind of the resigning employee, that he is willing and content to resign on the terms which he has negotiated and which are satisfactory to him, then we think there is no room for the principle to be derived from the decided cases. In such a case he resigns because he is willing to resign as the result of being offered terms which are to him satisfactory terms on which to resign. He is no longer impelled or compelled by the threat of dismissal to resign, but a new matter has come into the history, namely that he has been brought into a condition of mind in which the threat is no longer the operative factor of his decision; it has been replaced by the emergence of terms which are satisfactory. Therefore we think that the finding that Mr Sheffield had agreed to terms upon which he was prepared to agree to terminate his employment with the company – terms which were satisfactory to him – means that there is no room for the principle and that it is impossible to upset the conclusion of the tribunal that he was not dismissed.
(emphasis added)
Thus, constructive dismissal does not extend to the circumstance in which an employee ‘is willing and content to resign on the terms which he [or she] has negotiated and which are satisfactory to him [or her]’.
Such a circumstance does not constitute a ‘forced’ resignation so as to come within the definition of ‘dismissed’ in s 386(1)(b) of the FW Act. Rather, the person has resigned willingly ‘as the result of being offered terms which are to (that person) satisfactory terms on which to resign’……………………….
Importantly, the Letter of Resignation establishes a prima facie case that Ms Aragon was not forced to resign her employment and that the FWO has no reasonable prospect of success in its constructive dismissal claim. The FWO must therefore adduce evidence pointing to specific factual or evidentiary disputes that make a trial necessary: Jefferson Ford at [127]. To this end the Court must draw all reasonable inferences in favour of the FWO but only reasonable inferences: Jefferson Ford at [132]. Further if a factual contest is unnecessary to the resolution of the cause of action pleaded, that will not prevent the court entering judgment: Jefferson Ford at [130].”
Fair Work Ombudsman v Austrens International Pty Ltd (2018) FCA 171 delivered 28 February 2018 per Gilmour J