Unfair dismissal cases; when resignation is dismissal

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

18

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 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.”

[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