When can a resignation be an unfair dismissal?

These passages from a recent unfair dismissal case in the Fair Work Commission are an excellent forensic analysis of the legal principles which apply when determining whether the resignation of an employee may be regarded as a dismissal, commonly referred to as a constructive dismissal.

“Legislation and Case Law

Meaning of dismissed

[45] Section 386 of the Act states:

“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.”

[46] Section 386(1)(a) does not apply as the parties agreed that the Applicant tendered her

resignation. The question is whether the Applicant was forced to resign because of conduct, or

a course of conduct engaged by the Respondent.

[47] The case of Mohazab v Dick Smith Electronics (No 2) (1995) 62 IR 200 is foundational,

considering what is classified as a ‘forced resignation’. There it was stated:7

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.

(emphasis added)

[48] In Bupa Aged Care Australia Pty Ltd T/A Bupa Aged Care Mosman v Shahin Tavassoli

[2017] FWCFB 3941, the Full Bench helpfully expounded on Mohazab:

[31] The approach taken in Mohazab that a termination of employment at the initiative

of the employer could be constituted by a “forced” resignation was followed in

numerous decisions made in respect of the various iterations of the termination of

employment scheme in the Workplace Relations Act 1996. These decisions most

notably include Rheinberger v Huxley Marketing Pty Limited and O’Meara v Stanley

Works Pty Ltd. In the former decision, the Industrial Relations Court (Moore J) referred

to Mohazab and said:

“However it is plain from these passages that it is not sufficient to demonstrate

that the employee did not voluntarily leave his or her employment to establish

that there had been a termination of the employment at the initiative of the

employer. Such a termination must result from some action on the part of

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the employer intended to bring the employment to an end and perhaps

action which would, on any reasonable view, probably have that effect. I

leave open the question of whether a termination of employment at the initiative

of the employer requires the employer to intend by its action that the employment

will conclude. I am prepared to assume, for present purposes, that there can be a

termination at the initiative of the employer if the cessation of the employment

relationship is the probable result of the employer’s conduct.”

[32] In the latter decision a Full Bench of the Australian Industrial Relations

Commission said:

“[23] … 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.”

[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…”

(emphasis added)

[49] The onus to prove that a resignation was not voluntary and formed a constructive

dismissal lies with the employee alleging constructive dismissal occurred.8 Case law regarding

constructive dismissal has established that the line distinguishing conduct which leaves an

employee no real choice but to resign, from an employee resigning at their own initiative is a

narrow one, which must be “closely drawn and rigorously observed.”9

Construction of ‘forced’

[50] The decision of Senior Deputy President Richards in Megna v No 1 Riverside Quay

(SEQ) Pty Ltd provides instruction on how to interpret “forced”:10

“[14] It seems that the term “forced” is the past tense of the verb form “to force”, and as

such, an understanding of the plain meaning of the term “force” is relevant to applying

s.642(4).

[15] Relevantly, the Macquarie Dictionary defines “force” as:

… strength or power exerted upon an object; physical coercions; violence …

power to influence, affect or control; power to convince … to compel; constrain

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or oblige (oneself or someone) to do something … to bring about or effect by

force; bring about of necessity or as a necessary result … to put or impose

(something) forcibly on or upon a person … to press, urge or exert to violent

effort or to the utmost …

[16] The term “force” appears to encompass both the application of physical power to

directly achieve a result and the actions of a person to persuade or otherwise

convince another for the same purpose. In either case, there is an important

element of compulsion present.

[17] In the contextual circumstances now before the Commission, the issue is whether

the Applicant herself is able to demonstrate:

  • That she did not voluntarily resign her position or employment;
  • But that her employer, because of its actual conduct, forced her to do so,

such that there was an element of compulsion present.”

(emphasis added)

No effective or real choice but to resign

[51] In determining whether the Applicant was left with “no effective or real choice but to

resign”, there are numerous case law examples from which to draw. In Boulic v Robot Building

Supplies, it is held:11

“[16] From the many authorities on this subject it appears that there must be a “critical

action” or “critical actions” of the employer which was intended to bring the

“employment relationship” to an end and perhaps action which would on any reasonable

view probably have that effect. In identifying both the critical action of the employer

and its intent “it is a matter of objectively looking at the employer’s conduct as a whole

and determining whether its effect, judged reasonably and sensibly, is such that the

employee cannot be expected to put up with it.” The examination of the employer’s

conduct must also take into account that the employer is under an implied obligation that

it “will not without reasonable and proper cause, conduct itself in a manner calculated

or likely to destroy or seriously damage the relationship of confidence and trust between

employer and employee.”

[52] In Bruce v Fingal Glen Pty Ltd T/A Comfort Inn Adelaide Riviera, Senior Deputy

President O’Callaghan stated that there must be consideration of all alternative options available

to the employee:12

“[28] Whilst in absolutely no way condoning Fingal Glen’s behaviour, I have concluded

that the resignation decision was based on Ms Bruce’s perception and a perfectly

understandable and subjective response. That resignation decision was not, as of 10

January 2013, the only option open to Ms Bruce.”

[53] In Ashton v Consumer Action Law Centre, Commissioner Bissett considered whether

an employee was forced to resign due to supervisory requirements placed on the employee,

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which he claimed were so onerous that it made his job impossible to do. However, it was stated

in that decision that even where an employee believes supervisory requirements to be harsh, it

does not mean they are so. Further, it was determined: 13

“[59] It is not expected that employees will always be happy in their employment.

Dissatisfied employees resign from their employment on a regular basis. That they were

not satisfied with management’s actions or decisions does not mean that there was a

constructive dismissal or that the actions of the employer, viewed objectively, left the

employee with no choice but to resign.

[60] That, following the grievance outcome and the delivery to him of a letter

seeking his response on performance matters, Ashton felt he had no choice but to

resign does not mean that the actions of the Respondent were intended to force that

resignation.

[61] In this matter, viewed objectively, the actions of the employer in investigating Mr

Ashton’s grievance and/or in instigating higher level supervisory requirements and/or

in providing him with a letter outlining specific areas of concern with his performance

were not designed to force Ashton to resign.

[62] I find that Mr Ashton was not forced to resign because of conduct, or a course of

conduct, engaged in by his employer.”

(emphasis added)

[54] In Ms Alys Lloyd v P D Curran Plumbing Pty Ltd, Commissioner Riordan was satisfied

that the Applicant was not forced and willingly resigned from her role.14 There were other

avenues available to the Applicant if she truly believed she was being bullied.15 The Applicant

asserted that the Respondent was not dealing with her complaints of bullying. The

Commissioner accepted that the Respondent may not be dealing with them in an expeditious

manner. However, the Commissioner was satisfied that the Respondent was adopting

reasonable management action to ensure that the employees operated in accordance with the

Respondent’s policies.16

Consideration

[55] I have had regard to all the material and evidence provided by each party and on balance,

I am not satisfied with the evidence provided that there was a history of bullying.

[56] It is uncontentious that the Applicant resigned from her employment with the

Respondent. Yet, the Applicant asserts that she was forced to resign. My decision is based upon

whether the Applicant was dismissed within the meaning of s.386(1)(b) of the Act.

[57] The decision turns on whether the employer’s conduct intended or had the probable

effect or result of bringing the employment of the relevant employee to an end, such that the

employee effectively had no choice but to resign.

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[58] The Applicant asserts that the lack of management action by Mr Carter to protect her

from Mr Grainger’s and Mr Skamperle’s targeted bullying is what led to her resignation on 5

December 2022. She provided her own testimony as well as the testimony of Ms Singh and Ms

Hadley to validate her allegations. The allegations of bullying raised by the Applicant by the

Respondent were:

[59] After much consideration, I find that the Applicant’s witnesses failed to provide

evidence to support the claims of bullying to the extent where she was compelled to resign. The

Applicant and her witnesses did attest that Mr Grainger and Mr Skamperle did, on occasion,

raise their voices, swear at the Applicant, and disparage her work ethic. These actions are not

so significant that it could persuade or otherwise convince the Applicant to resign. The

Applicant may have been justifiably irate and disgruntled by the way the Duty Managers

interacted with the Applicant. However, these actions were not meant to force her resignation.

[60] Regarding the events of the main incident on Saturday, 3 December 2022, the Applicant

asserts that she was being singled out by Mr Grainger and Mr Skamperle as she thought the

task of folding cutlery should have been assigned to the bistro staff. Mr Carter rejects this claim,

stating that the bistro staff were busy and unable to carry out the task. The Applicant provided

that she thought the bistro staff were not busy. On balance, the direction given by Mr Grainger

was a lawful and reasonable direction noting that the Applicant is a food and beverage waiter

and as part of her role, it is not outside of the scope of her duties that she may be expected to

roll cutlery. When she refused to fold the cutlery, Mr Skamperle had to ask the Applicant a

second time while she was working in the fridge. As Ms Hadley offered to do the cutlery

folding, I consider that the direction made by Mr Skamperle was likely quite abrasive

considering that Ms Hadley offered to do the cutlery folding around the time the Applicant was

asked. However, the request is not conduct which would substantiate that the Applicant was

bullied.

[61] The Applicant may not have had the immediate intention of resigning at the meeting on

Monday, 5 December 2022. Depending on how the meeting went, one of the possible outcomes

envisaged by the Applicant was resignation. This indicates to me that she was not compelled to

resign but one that was considered for a period of time between the incident the meeting on 5

December 2022.

[62] I am satisfied that Mr Carter was still looking into the incident that occurred on Saturday,

3 December 2022. He had heard the Applicant’s story and the Duty Managers’ story. He was

attempting to obtain more information at the meeting to determine how to handle the situation.

Mr Carter noted that he was disappointed that the Applicant resigned. He did not want to see

the Applicant gone as he needed her assistance for the festive season. The Respondent did not

have the time or resources to find and train a new staff member in preparation for the busy

holiday season.

[63] When Mr Carter relayed the information, he had from discussions with Mr Grainger and

Mr Skamperle on Sunday, 4 December 2022, the Applicant made the decision to resign from

her employment. I do not accept that resignation was the only option available to the Applicant

at the meeting on Monday, 5 December 2022, nor the Respondent’s conduct force the Applicant

to resign.

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Conclusion

[64] Taking into account all of the circumstances and the totality of the evidence in this

matter, I am not satisfied that the Respondent’s actions left the Applicant no option but to resign.

Ms Riley was not forced to resign because of conduct, or a course of conduct engaged in by the

Respondent.

[65] I find that there was not a dismissal pursuant to s.386(1)(b) of the Act.

[66] The application is therefore dismissed. I Order accordingly.”

 

Riley v Mills Hotels Pty Ltd [2023] FWC 856 delivered 11 April 2023 per Lake DP