Unfair dismissal; beware the ineffective resignation

Employers need to exercise caution when presented with a resignation lest it not constitute a real one.

“Was Mr Yang dismissed?

[48] Section 386 of the FW Act relevantly provides as follows:

“386 Meaning of dismissed

(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.

… ….” ”

41

[2023] FWC 1325

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[49] Mr Yang, in effect, relies upon s.386(1)(a) of the FW Act. Having put the parties on

notice during the hearing, I have also considered whether there was a resignation, whether any

purported resignation was effective, and whether any resignation was forced. Ultimately, I

would not consider that any valid resignation would have been forced, but this final aspect does

not arise for reasons that are set out below.

[50] Although applied under the predecessor to the FW Act,42 the following approach of the

Full Bench of the Australian Industrial Relations Commission in O’Meara v Stanley Works Pty

Ltd43 in my view remains generally apposite to the consideration of s.386(1) of the FW Act:

“[21] In this Commission the concepts have been addressed on numerous occasions

and by a number of Full Benches. In Pawel v Advanced Precast Pty Ltd (Pawel) a Full

Bench said:

“[13] It is plain that the Full Court in Mohazab considered that an important

feature in the question of whether termination is at the initiative of the employer

is whether the act of an employer results directly or consequentially in the

termination of the employment and that the employment relationship is not

voluntarily left by the employee. However, it is to be noted that the Full Court

described it as an important feature. It plainly cannot be the only feature. An

example will serve to illustrate this point. Suppose an employee wants a pay rise

and makes such a request of his or her employer. If the employer declines and

the employee, feeling dissatisfied resigns, can the resignation be said to be a

termination at the initiative of the employer? We do not think it can and yet it

can be said that the act of the employer i.e. refusing the pay rise, has at least

consequentially resulted in the termination of the employment. This situation

may be contrasted with the position where an employee is told to resign or he or

she will be terminated. We think that all of the circumstances and not only the

act of the employer must be examined. These in our view, will include the

circumstances giving rise to the termination, the seriousness of the issues

involved and the respective conduct of the employer and the employee. In the

instant case the uncontested factual findings are that the applicant had for almost

the whole of his employment performed welding duties; that there was no

objective threat to his health and safety involved in the requirement that he

undertake welding duties so long as it was not on a continuous basis and that the

welding he was required to do was not continuous.”

[22] In the Full Bench decision of ABB Engineering Construction Pty Ltd v Doumit

(ABB Engineering) it was said:

“Often it will only be a narrow line that distinguishes conduct that leaves an

employee no real choice but to resign employment, from conduct that cannot be

held to cause a resultant resignation to be a termination at the initiative of the

employer. But narrow though it be, it is important that that line be closely drawn

and rigorously observed. Otherwise, the remedy against unfair termination of

employment at the initiative of the employer may be too readily invoked in

circumstances where it is the discretion of a resigning employee, rather than that

[2023] FWC 1325

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of the employer, that gives rise to the termination. The remedies provided in the

Act are directed to the provision of remedies against unlawful termination of

employment. Where it is the immediate action of the employee that causes the

employment relationship to cease, it is necessary to ensure that the employer’s

conduct, said to have been the principal contributing factor in the resultant

termination of employment, is weighed objectively. The employer’s conduct

may be shown to be a sufficiently operative factor in the resignation for it to be

tantamount to a reason for dismissal. In such circumstances, a resignation may

fairly readily be conceived to be a termination at the initiative of the employer.

The validity of any associated reason for the termination by resignation is tested.

Where the conduct of the employer is ambiguous, and the bearing it has on the

decision to resign is based largely on the perceptions and subjective response of

the employee made unilaterally, considerable caution should be exercised in

treating the resignation as other than voluntary.”

[23] In our view the full statement of reasons in Mohazab which we have set out

together with the further explanation by Moore J in Rheinberger and the decisions of

Full Benches of this Commission in Pawel and ABB Engineering require that there to

be some action on the part of the employer which is either intended to bring the

employment to an end or has the probable result of bringing the employment

relationship to an end. It is not simply a question of whether “the act of the employer

[resulted] directly or consequentially in the termination of the employment.” Decisions

which adopt the shorter formulation of the reasons for decision should be treated with

some caution as they may not give full weight to the decision in Mohazab. In

determining whether a termination was at the initiative of the employer an objective

analysis of the employer’s conduct is required to determine whether it was of such a

nature that resignation was the probable result or that the appellant had no effective or

real choice but to resign.” (footnotes omitted)

[51] A more recent Full Bench reinforced the relevance of the above approach in Bupa Aged

Care Australia Pty Ltd t/a Bupa Aged Care Mosman v Tavassoli44 in the following terms:

“[33] Notwithstanding that it was clearly established, prior to the enactment of the FW

Act, that a “forced” resignation could constitute a termination of employment at the

initiative of the employer, the legislature in s.386(1) chose to define dismissal in a way

that retained the “termination at the initiative of the employer” formulation but

separately provided for forced resignation. This was discussed in the Explanatory

Memorandum for the Fair Work Bill as follows:

“1528. This clause sets out the circumstances in which a person is taken to be

dismissed. A person is dismissed if the person’s employment with his or her

employer was terminated on the employer’s initiative. This is intended to capture

case law relating to the meaning of ‘termination at the initiative of the employer’

(see, e.g., Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 200).

  1. Paragraph 386(1)(b) provides that a person has been dismissed if they

resigned from their employment but were forced to do so because of conduct, or

[2023] FWC 1325

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a course of conduct, engaged in by their employer. Conduct includes both an act

and a failure to act (see the definition in clause 12).

  1. Paragraph 386(1)(b) is intended to reflect the common law concept of

constructive dismissal, and allow for a finding that an employee was dismissed

in the following situations:

  • where the employee is effectively instructed to resign by the

employer in the face of a threatened or impending dismissal; or

  • where the employee quits their job in response to conduct by the

employer which gives them no reasonable choice but to resign.”

[34] It is apparent, as was observed in the decision of the Federal Circuit Court

(Whelan J) in Wilkie v National Storage Operations Pty Ltd, that “The wording of

s.386(1)(b) of the Act appears to reflect in statutory form the test developed by the Full

Court of the then Industrial Relations Court of Australia in Mohazab v Dick Smith

Electronics Pty Ltd (No. 1) and summarised by the Full Bench of the Australian

Industrial Relations Commission in O’Meara v Stanley Works Pty Ltd” (footnotes

omitted). The body of pre-FW Act decisions concerning “forced” resignations,

including the decisions to which we have earlier referred, has been applied to

s.386(1)(b): Bruce v Fingal Glen Pty Ltd (in liq); Ryan v ISS Integrated Facility Services

Pty Ltd; Parsons v Pope Nitschke Pty Ltd ATF Pope Nitschke Unit Trust.” (footnotes

omitted)

[52] An employer is generally able to treat a clear and unambiguous resignation as a

resignation. However, where a resignation is given in the heat of the moment or under extreme

pressure, special circumstances may arise. That is, in some circumstances it may be

unreasonable to assume a resignation and accept it immediately. Further, the employer may

have a duty to confirm the intention to resign if, during that time, they are put on notice that the

resignation was not intended.45

[53] Accordingly, the general principles to be applied in this case are well settled. Stated

succinctly, they include:

  • The question as to whether there was a dismissal within the meaning of the FW Act

is a jurisdictional fact that must be established by the Applicant;

  • A termination at the initiative of the employer involves the conduct (or course of

conduct) engaged in by the employer as the principal constituting factor leading to

the termination. There must be a sufficient causal connection between the conduct

and the resignation such that it “forced” the resignation;

  • The employer must have engaged in some conduct that intended to bring the

employment relationship to an end or had that probable result;

  • Conduct includes an omission;

[2023] FWC 1325

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  • Resignations that are clear and unambiguous may be treated on face value unless

special circumstances are present which warrant the employer confirming the

intention of the employee;

  • Considerable caution should be exercised in treating a resignation as other than

voluntary (forced) where the conduct of the employer is ambiguous and it is

necessary to determine whether the employer’s conduct was of such a nature that

resignation was the probable result such that the employee had no effective or real

choice but to resign; and

  • In determining the question of whether the termination was at the initiative of the

employer, an objective analysis of the parties’ conduct is required.

[54] I have found that during one of the discussions between the Applicant and Mr Wang,

the Applicant did advise to the effect that he intended to quit his job. This was stated during a

highly emotional discussion, and it could not be said that an actual resignation was provided.

In any event, given the context, I do not consider that it was reasonable for the Respondent to

treat this as a resignation and seek later in the day to rely upon it. The actions of the Applicant

in seeking to resolve his sense of unfairness with the General Manager and later again with

Mr Wang, and his return to the workplace to do so, should have created uncertainty about

whether any resignation was intended. These are the kind of exceptional circumstances46

referred to earlier. In that context, the Respondent made no further inquiries to determine

whether the Applicant’s purported resignation was really intended. Further, given the conduct

of both parties on the day in question, at the time when it was purportedly accepted by SAL, I

do not consider a reasonable period of time had lapsed, after the Applicant advised or implied

to the Respondent that he intended to quit his job, for an objective understanding about that

intention to be reached.

[55] Mr Wang, on behalf of the Respondent and later confirmed by Mr Rong, in accepting

the purported resignation, actually brought the employment to an end at the employer’s

initiative.

[56] This was a dismissal within the meaning of the FW Act. There is jurisdiction to deal

with the merit of this application.”

 

Extract from Yang v SAL HR Services Pty Ltd [2023] FWC 1325 delivered 4 July 2023 per Hampton DP