A constructive dismissal may be claimed when an employee feels forced to resign from their employment due to some action taken by the employer.  Whilst it may be easy to assume that the employer is ‘in the clear’ because the employee resigned, in a recent decision, Hattingh v Compass Group (2021) FWC 1564 per Spencer, the Fair Work Commission reiterates the principles of a constructive dismissal that all businesses must be aware of. 

Under section 386 of the Fair Work Act, a person is taken to be dismissed if:

• the person’s employment with his/her employer has been terminated on the employer’s initiative; or

• the person has resigned from his/her employment but was forced to do so because of conduct or a course of conduct, engaged in by his/her employer.

If you are faced with an employee who has resigned under difficult circumstances, here are some key points to consider:

• If the employee provides an unambiguous resignation to the employer, the starting point is that the employee has resigned unless there is some context between the employee and employer that requires further examination.

• If an employee resigns because he/she is disgruntled with the way they have been treated in the workplace, this will not necessarily mean that the resignation was not voluntary. It is important that when an employee raises a complaint that the employer manages these issues fairly and in line with their policies and procedures. 

• A resignation is not legally effective if it was provided in the “heat of the moment”. In these circumstances, it is advised that the employer seeks to confirm the employee’s intentions to resign.  This could be in the form of a meeting with the employee to clarify their intention.

• If the employee claims that their resignation was a direct result of the employer’s conduct, the FWC will consider whether the employer engaged in conduct with the intention of bringing the employment relationship to an end.  

This decision highlights the importance of ensuring that any grievance or performance management issue is managed fairly and consistently in line with policies and procedures.  If you are faced with an employee who is threatening to resign or has resigned under difficult circumstances, it is essential to seek advice from your expert team at Caris Consulting.