When is a resignation an unfair dismissal?

These passages from a recent unfair dismissal case discuss the legal issues associated with the concept of constructive dismissal.

“When is a person dismissed?

[10] The meaning of ‘dismissed’ is defined in s.386(1) of the Act which states:

(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.

[11] In Bupa Aged Care Australia Pty Ltd v Shahin Tavassoli1

(Bupa), a Full Bench of the

Commission examined the relevant authorities as to what constitutes ‘dismissed’ under s.386(1)

which included the following:

(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

[2023] FWC 2341

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employee had no effective or real choice but to resign. Unlike the situation in (1),

the requisite employer conduct is the essential element.

[12] In Lance Gunther & Michele Daly v B & C Melouney T/A Easts Riverside Holiday Park2

 

Deputy President Sams noted the following when considering whether the applicant was

dismissed:

  1. Jurisdiction can only exist where termination of employment at the initiative of the

employer has occurred. ‘Initiative’ is relevantly defined in the New Shorter Oxford

Dictionary as: “the action of initiating something or of taking the first step or the

lead; an act setting a process or chain of events in motion; an independent or

enterprising act.”

  1. This definition was considered in Mohazab v Dick Smith Electronics Pty Ltd

(Mohazab) where a Full Court of the Industrial Relations Court of Australia said,

‘… a termination of employment at the initiative of the employer may be treated as

a termination in which the action of the employer is the principal contributing factor

which leads to the termination of the employment relationship.’

  1. In Mohazab, the Full Court also said:

‘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.’

  1. A Full Bench of the AIRC in Stubbs v Austar Entertainment Pty Ltd said, ‘… to

constitute termination at the initiative of the employer the termination must be the

direct or consequential result of ‘some action on the part of the employer intended

to bring the employment to an end and perhaps action which would, on any

reasonable view, probably have that effect …’[Rheinburger v Huxley Marketing, 16

April 1996 per Moore J].

Consideration

[13] Having considered the evidence and submissions, I find that the Applicant was not

dismissed within the meaning set out in s386(1) of the Act, in that he was not dismissed at the

initiative of the Respondent, nor was he forced to resign because of conduct engaged in by the

Respondent.

[2023] FWC 2341

4

[14] To the extent the Applicant suggested he was forced to resign, I reject this argument.

There is simply no compelling evidence to support such a finding, including any suggestion

that the resignation was given ‘in the heat of the moment’.

[15] In the hearing, the Applicant focussed on his contention that he was dismissed on 4 May

  1. His application form and materials filed in support of his application record 4 May as his

dismissal date. The Applicant submitted that “I only initiated that termination by tendering my

resignation with the appropriate notice period of 4 weeks, it was ultimately my employer who

choose to terminate this relationship by dismissing me effective immediately after learning the

reasons I was leaving the company on May 4th 2023 which was 13 days after I had originally

submitted my resignation by email”.

[16] The Applicant gave evidence that Mr Khan told him during the meeting on 4 May that

he was ‘dismissed’. The evidence of the Respondent’s witnesses is that the Applicant was told

to ‘leave now’ but the word ‘dismissed’ was not used. I am satisfied on the evidence that the

Respondent did not dismiss the Applicant, but instead made a lawful and reasonable decision

to not require the Applicant to work the remainder of his notice period. This was reasonable in

circumstances where the Applicant refused to provide a handover of his work to another

employee. It was lawful in that payment in lieu of notice was an option available to the

Respondent under the terms of the Applicant’s employment contract. In other words, he was

not dismissed on 4 May 2023.

[17] The Applicant initially disputed he was paid the balance of his notice period, but in cross

examination he conceded the payment he received was ‘close to’ what he thought he should

have received in his final pay. I am satisfied, based on the payslips in evidence, that the

Applicant was paid out the balance of his notice period.

[18] In summary, there is absolutely no doubt the Applicant resigned of his own accord. He

worked two weeks of his four-week notice period and was paid the balance of his notice period.

This was not a termination at the initiative of the Respondent.

[19] For completeness, if I am wrong and the Applicant was unfairly dismissed on 4 May,

the undisputed fact of the Applicant’s resignation means that his employment would have

ceased at the end of the notice period, being 22 May 2023. In circumstances where the Applicant

did not seek reinstatement, the maximum amount of compensation that could have been

awarded is the pay he would have received between 4 May and 22 May 20233

. Given the

Respondent has already paid the Applicant for this period, he has suffered no compensable loss.

[20] This application is dismissed. ”

 

Conroy v Optus Administration Pty Ltd [2023] FWC 2341 delivered 18 September 2023 per Dean D