What is a constructive dismissal

Here is a statement of the essential legal elements of a constructive dismissal.

“In Bupa Aged Care Australia Pty Ltd v Tavassoli (“Bupa v Tavassoli”) 8, a Full Bench of the Commission, after a consideration of authorities regarding termination at the initiative of the employer and forced resignation, observed:

“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 whether termination of the employment was the probably 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.”

Kibret v Stanbuli Pty Ltd (2020) FWC 363 dlievered 23 January 2020 per Cross DP