This is a very good explanation of the circumstances in which an employer may be regarded as having dismissed an employee notwithstanding that the employee resigned his or her employment because it is regarded as a termination of employment at the employer’s initiative.
“Consideration
[85] Having made relevant factual findings above, I now turn to consider whether the
Applicant was dismissed at the initiative of the Respondent within the meaning of s 386(1)(b)
of the Act as he contends. Before doing so it is necessary to refer to some relevant authorities.
[86] The authorities in respect of the meaning of the term ‘dismissed’ are well traversed. In
a decision made prior to the passage of the Act, the Full Court of the Industrial Relations Court
of Australia Mohazab v Dick Smith Electronics Pty Ltd48 (Mohazab) was considering whether
an employee had been forced to resign in circumstances where the employee signed a letter of
resignation drafted by the employer shortly after being interviewed in relation to allegations of
dishonesty. After setting out the findings of fact the Full Court said the following when
considering the meaning of ‘termination at the initiative of the employer;’
“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. This issue was addressed by
Wilcox CJ in APESMA v David Graphics Pty Ltd (“David Graphics”), Industrial
Relations Court of Australia, NI 94/0174, 12 July 1995, as yet unreported, Wilcox CJ.
His Honour, at 3, referred to the situation an employee who resigned because “he felt he
had no other option”. His Honour described those circumstances as:-
“… a termination of employment at the instance [of] the employer rather than of
the employee.”
and at 5:-
“I agree with the proposition that termination may involve more than one action.
But I think it is necessary to ask oneself what was the critical action, or what
were the critical actions, that constituted a termination of the employment.’” (our
emphasis added)”
[87] In a more recent Full Bench decision in Bupa Aged Care Australia Pty Ltd t/a Bupa
Aged Care Mosman v Shahin Tavassoli49 (Bupa), the Full Bench was dealing with an appeal of
a decision in which the member at first instance found that the dismissal was within the meaning
of s.386(1) and that the dismissal was unfair. The Full Bench in Bupa was concerned with a
‘forced’ resignation and how the passage of the FW Act impacted prior authorities when it
stated as follows;
“[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
[2023] FWC 541
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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).
- 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 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).
- 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.”
[88] Having identified there were two elements to s.386(1) and after extensively considering
the authorities, the Full Bench then said;
“[47] Having regard to the above authorities and the bifurcation in the definition of
“dismissal” established in s.386(1) of the FW Act, we consider that the position under
the FW Act may be summarised as follows:
(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
[2023] FWC 541
19
whether termination of the employment was the probable result of the
employer’s conduct such that the employee had no effective or real choice
but to resign. Unlike the situation in (1), the requisite employer conduct is the
essential element.”
[89] As previously stated the Applicant contends that he was dismissed by the Respondent
within the meaning of 386(1)(b), that is, he was forced to resign because of conduct or a course
of conduct engaged in by the Respondent. The Respondent rejects that submission and argues
the Applicant resigned because he had secured a new role with the College as revealed by the
chronology of events. I accept that the Applicant applied for and secured a new role with the
College. That does not however mean that his decision to resign was not made as a consequence
of the Respondent’s conduct or course of conduct. It is to that conduct the Applicant relies on
that I now turn.
[90] I have made a number of evidentiary findings above in relation to the conduct of the
Respondent which may be summarised as follows;
- the Respondent had formed a view following an August 2022 performance review that
it did not want the Applicant in the Supervisor role and felt his skills would be better
utilised as a carpenter;
- the Applicant was offered the more junior role of Leading Hand which he declined, as
a result of which he was threatened with performance management despite being
assessed as a “solid achiever” in his earlier performance review;
- in a meeting on 14 September 2022, the Respondent told the Applicant that his role of
Supervisor was no longer required and that he should consider resigning, this being
subsequently restated in a telephone conversation on 16 September 2022 between the
Applicant and Mr Goodwin;
- having declined to resign or accept the more junior Leading Hand role, the Applicant
was notified of the potential redundancy of his position on 12 October 2022, that being
despite the Respondent now conceding that the role of Supervisor is still needed and has
been advertised for several months;
- the Applicant ceased to receive direct instructions from his immediate supervisor from
mid-September 2022 and ceased to receive the normal weekly reports from 14 October
2022;
- the Applicant’s company vehicle was unilaterally removed from his private property by
the Respondent during a period of personal/carers leave on 17 October 2022 and was
not returned to him prior to his termination of employment despite it being a contractual
entitlement;
- on 26 October 2022, the Applicant was again told during the meeting held to discuss
the potential redundancy of his role, that his position was no longer required, that a
carpenter position was available as an alternative and that a redundancy was likely;
[2023] FWC 541
20
- the Applicant was required to return his company vehicle keys, vehicle manual, work
on-site keys and Link toll pass for his company vehicle at the 26 October 2022 meeting.
[91] I am satisfied that the conduct engaged in by the Respondent had as its objective that of
securing either the Applicant’s resignation or his agreement to the take on the lesser role of
Leading Hand. That is evident in my view from the consistent pattern of behaviour directed
towards the Applicant which made it abundantly clear to him that he had no future with the
Respondent in the Supervisor role. The Respondent’s narrative of their being business
uncertainty and a need for a restructure at the time of the Applicant’s resignation as claimed by
the Respondent must be rejected on two grounds. Firstly, there was no evidence that the
Respondent undertook any restructure before or since the Applicant’s termination of
employment. Secondly, the Respondent confirmed that the role of Supervisor remains a
required position for which they have been advertising for several months without success. This
reinforces the finding I have made above that the Respondent wanted to remove the Applicant
from the Supervisor role.
[92] I readily accept that while there may have been good reasons for the Applicant to resign
on 2 November 2022, that does not necessarily mean that the employment was not voluntarily
left. That was made clear by a Full Bench in Doumit v ABB Engineering Construction Pty Ltd50
(Doumit) when they stated as follows;
“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 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.”
[93] I accept that the line between conduct that leaves no choice but to resign and conduct
that cannot be held to cause the resignation must be “rigorously observed”. It is however a line
in the present case I am satisfied has been crossed. Confronted with a campaign to remove him
from the role and being unwilling to take on a lesser role that was offered, the Applicant made
the prudent decision to seek alternate employment. He secured an alternate role and resigned.
It might be said that the resignation was motivated not by the conduct of the Respondent but by
[2023] FWC 541
21
the Applicant obtaining an alternate role. This was however not a case where the Applicant was
simply unhappy in his role and seeking “greener pastures”. He was in my view being
progressively and aggressively pushed to resign by the Respondent.
[94] I am satisfied that the conduct directed towards the Applicant by the Respondent, which
I have made findings on and summarised above, was taken with the intention of either forcing
the Applicant into a more junior role or bringing the employment to an end. If that was not the
Respondent’s intention, which I do not accept, the probable result of the Respondent’s conduct
was in any event such that the Applicant had no effective or real choice but to resign in the face
of the actions taken against him by the Respondent. It follows that I am satisfied that the
termination of the Applicant’s employment was at the initiative of the Respondent and that the
Applicant was dismissed within the meaning of s 386(1)(b) of the Act.
[95] Having found that the Applicant was dismissed it is necessary for me to now consider a
number of preliminary matters.”
Chapman v Site Clean Management Services Pty Ltd (2023) FWC 541 delivered 7 March 2023 per Masson DP