This extract from a decision of the Fair Work Commission in an unfair dismissal case contains an excellent summary of the legal principles which apply when determining whether a resignation can amount to a constructive dismissal.
“Has the Applicant been dismissed?
[32]
A threshold issue to be determined in this matter is whether the Applicant has been dismissed from his employment. The circumstances in which a person is taken to be “dismissed” are set out in s 386 of the Act. Section 386(1) relevantly provides as follows:
(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.
[33]
Section 386(2) of the Act sets out circumstances where an employee has not been dismissed, none of which are presently relevant.
[34]
The authorities in respect of the meaning of the term ‘dismissed’ are well traversed and it is useful to detail some of them at this point. In a decision made prior to the passage of the Act, the Full Court of the Industrial Relations Court of Australia in Mohazab v Dick Smith Electronics Pty Ltd45 (Mohazab) was considering whether an employee had been forced to resign in circumstances where the employee signed a letter of resignation drafted by the
45 [1995] IRCA 625; 62 IR 200.
[2026] FWC 2635
12
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)”
[35]
In a more recent Full Bench decision in Bupa Aged Care Australia Pty Ltd t/a Bupa Aged Care Mosman v Shahin Tavassoli46 (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 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).
46 [2017] FWCFB 3941.
[2026] FWC 2635
13
1529. 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).
1530. 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.”
[36]
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 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.”47 (my emphasis added)
47 Ibid.
[2026] FWC 2635
14
[37]
In the present matter I discern from the Applicant’s arguments in the proceedings that she contends she was dismissed within the meaning of the first limb of s. 386(1), that being she was dismissed at the Respondent’s initiative.
Consideration
Whether Respondent’s conduct or course of conduct forced the resignation of the Applicant (s. 386(1)(a)
[38]
The Applicant submits that her agreement to a mutual separation was a result of pressure applied by Mr Simpson in circumstances where she was unwell, where she was on medication and where it ought to have been apparent to Mr Simpson that she did not wish to leave her employment. She further submits that she did not submit a formal resignation and her agreement to a mutual separation was in the heat of the moment. This she says ought to have been also apparent to the Respondent but it (the Respondent) took no steps to check or clarify that she did in fact wish to end her employment with the Respondent.
[39]
For its part, the Respondent submits that the Applicant initiated the proposed separation through her text messages to Mr Simposn on 6 January 2026. These messages were sent only one day after Mr Simpson had acknowledged and agreed to the Applicant taking a mixture of her remaining paid leave and then unpaid leave to cover her absence on sick leave up to 19 January 2026. The Respondent also rejects that the Applicant’s agreement to a mutually agreed separation was either pressured by the Respondent or agreed to in the ‘heat of the moment.’ In support of that submission, the Respondent refers to the Applicant’s second text of 6 January 2026 where she refers to her ‘careful consideration’ prior to suggesting to Mr Simpson in that text that he look for her replacement. The Respondent further submits that the Respondent only suggested that a mutually agreed separation could be arranged if the Applicant agreed and that she did not have to agree to the cessation of her employment when she received the Termination of Employment Letter on 9 January 2026 but did so anyway.
[40]
It is apparent from her evidence, both written and oral, that the Applicant felt a degree of guilt at being unable to fully support the Respondent in her role as she would have liked. This was because of the health issues she experienced in the lead up to the cessation of her employment. She had exhausted her paid personal leave entitlements and clearly felt vulnerable in her role. This can be seen in her text message to Mr Simpson on 9 November 2025 when she confronted him about having interviewed a candidate to replace her, a claim strongly denied by Mr Simpson in his response on 11 November 2025 and in his evidence in this matter which I accept. There is no probative evidence, merely a suspicion on the Applicant’s part, that Mr Simpson had commenced a search for her replacement prior to advertising the Applicant’s former role on 15 January 2026. Little however turns on this other than to highlight the Applicant’s feelings of insecurity in the role for the reasons previously stated.
[41]
The events in early January 2026 should be viewed in the context of the Applicant’s health issues and her sense of failing to support the Respondent as she wanted to. In that context, I accept that the Applicant offered Mr Simpson a solution by suggesting he look for her replacement. In doing so, she was certainly signalling that she was unable to fully support the Respondent in what was an important role. Contrary to the Respondent’s submission, I do not accept that she was signalling an intention to immediately resign. This can be seen in the
[2026] FWC 2635
15
communication after 6 January 2026 where she immediately indicated regret and sadness at leaving her employment and offered to provide assistance to the Respondent while it sought a replacement for her role.
[42]
Returning to the events of 6 January 2026, the Applicant’s first message to Mr Simpson disclosed her desire to improve her health and her willingness to work from home if allowed or take a mixture of paid and unpaid leave up to 19 January 2026. Because Mr Simpson did not immediately respond to that message, the Applicant perceived, unfairly in light of Mr Simpson’s earlier indicated support for her to take time off to 19 January 2026, that he was not supportive of the approach she proposed in her message. This provoked the Applicant to send the second message on 6 January 2026 in which she suggested Mr Simpson look for her replacement. This resulted in Mr Simpson’s response later on 6 January 2026 in which he observed she may not be well enough to remain in her role and proposed a mutually agreed separation if she agreed. The Applicant responded by agreeing to ‘his decision.’ This response is important as it indicates in my view that the Applicant believed the cessation of employment as proposed by the Respondent was not at her initiative.
[43]
I readily accept that the Applicant agreed to the proposal that there be a mutually agreed separation. However, that agreement needs to be seen in the context of the Applicant’s apparent state of mind at the time which I have discussed above, and that her agreement was rendered in circumstances where she was unable to properly fulfil the role requirements. I also note the Applicant’s evidence about her diagnosed anxiety and severe depression and that she was taking strong medication at the time of communicating her agreement to end her employment on 6 January 2026. Her misgivings were almost immediately apparent when she messaged Mr Simpson on 7 January 2026 that she felt sad at leaving and offered to continue to support the Respondent until it recruited her replacement. It should have been obvious to the Respondent that the Applicant’s agreement to a mutual separation on 6 January 2026 may not have been genuine and may have been given by her in a period of ‘emotional stress’.
[44]
Despite what should have been obvious, the Respondent did not seek to clarify with or question the Applicant on her apparent reservations about her proposed separation. Mr Simpson in his evidence explained that he did not seek to clarify the Applicant’s position after her 7 January 2026 message on the basis that she could have still declined to agree to the Termination of Employment Letter sent to her on 9 January 2026. I find that to be an unsatisfactory explanation when the terms of that letter did not invite the Applicant to agree or reject the mutually agreed separation. It simply recorded that a mutual agreement to end her employment had been reached on 6 & 7 January 2026. In the 9 January 2026 email from Mr Simpson to which the Termination of Employment Letter was attached, the Applicant was not invited to agree to the contents of the letter. She was simply invited to acknowledge receipt of the letter, which she dutifully did. To suggest as Mr Simpson did, that the Applicant had a choice on receipt of the letter on 9 January 2026 to revoke her agreement to end her employment, is rejected. The letter simply confirmed the end of the Applicant’s employment and brooked no disagreement in my view.
[45]
Further evidence of the Applicant’s strong misgivings about the mutually agreed separation can be seen in the Applicant’s subsequent communication with Mr Simpson on 15 January 2026 when she communicated that her health had improved such that she was available to assist until her replacement was found.
[2026] FWC 2635
16
[46]
In the circumstances described above, I find that the Applicant did not resign from her employment and that her agreement to the mutual separation of employment was provided while she was in an emotional state and was not genuine. I accept that she felt pressured by the Respondent and would not have felt she had a choice in circumstances where she had been unwell and was unable to fulfil the role requirements. I also accept based on my observation of the witness during her evidence that there was a degree of deference displayed by the Applicant towards Mr Simpson which also assists in explaining why the Applicant may have felt unable to resist the proposed mutually agreed separation. The Respondent failed to heed the obvious signals from the Applicant that she was not comfortable with her decision to end her employment. Mr Simpson did not check or clarify the Applicant’s intention. In my view he used the opportunity to ‘jostle’ the Applicant towards an employment separation. This leads me to find that the Applicant’s dismissal was at the Respondent’s initiative and that she was dismissed within the meaning of s 386(1)(a).
[47]
Having found that the Applicant was dismissed within the meaning of s 386(1) of the Act, I am required to deal with the second jurisdictional objection that the application was made out of time. It is to that I now turn.”
Bai v Furnace Engineering Pty Ltd [2026] FWC 2635 delivered 10 July 2026 per Masson DP