Legal development

Between a rock and a hard place When is a resignation voluntary or forced

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    What you need to know:

    • The Fair Work Commission has recently determined a series of unfair dismissal cases where employees have claimed they were forced to, or had no real choice but to, resign.
    • The decisions confirm the high threshold required to demonstrate that an employee was "forced" to resign – and no other option was available. 
    • Where an employee makes a choice, amongst various options, including continuing to participate in a process run by the employer to deal with bullying, the employee is less likely to prove the employer "forced" the employee to resign.

    What you need to do:

    • Ensure all staff, including managerial staff, receive adequate training on appropriate conduct, particularly workplace bullying and harassment.
    • Ensure accessible complaints processes are in place to report and manage inappropriate conduct, bullying or harassment, so that employees have effective and real choices as alternatives to resignation. 
    • Ensure appropriate processes and procedures are in place to manage resignations.

    Resignations as Constructive Dismissals 

    The threshold question in all unfair dismissal cases is whether the employee has been "dismissed" by the employer.  That must be due to either:

    (1) the employment being terminated at the employer's initiative; or 

    (2) the employee being forced to resign due to the conduct, or a course of conduct, engaged in by their employer.

    On the first limb, a resignation given in the "heat of the moment", where the employee was in a state of emotional stress or mental confusion and the employee could not reasonably be understood to be conveying a real intention to resign, can still amount to a dismissal at the employer's initiative if the employer simply accepts the resignation. 

    On the second limb, an employee can be considered to have been forced to resign where the employer engages in conduct with the intention of bringing the employee's employment to an end, or where termination was the probable result of the employer's conduct such that the employee had no effective or real choice but to resign. 

    Constructive dismissal claims have generally involved circumstances of "heat of the moment" resignations that have been accepted by the employer.  More recently, the Fair Work Commission has considered a number of cases in the second category – where the employee resigns due to bullying and harassment or a toxic work environment.

    The cases illustrate that whether an employee has been "forced" to resign is to be assessed objectively – and not on the subjective views of the employee that they have been bullied or even that the only way the employee can see to end bullying behaviour is to resign.  Whether that is in fact the case, and a result of conduct or omission by the employer, must be assessed reasonably and objectively, in the totality of the circumstances. 

    There is a fine line between conduct by an employer which leaves an employee with no real or effective choice but to resign, and the circumstance of an employee resigning at their own initiative.  It is a line which must be closely drawn and rigorously observed. The actions or omissions of the employer must have a sufficient causal connection with the resignation, such that the employee has been 'forced' to resign.  The employee bears the onus of proving this is the case.

    In the recent cases, where the employee made their own choice to resign, and there remained other options available – such as, for example, allowing a process to resolve interpersonal conflict to be completed – the employer is unlikely to be found to have "forced" the employee to resign. 

    Where an employee makes a choice to resign – even where they may do so to distance themselves from perceived bullying conduct – it will likely remain their own choice, and not one they were forced to take, if the employer is taking, or has taken, reasonable steps to deal with the bullying conduct.

    We explore some illustrative cases further below.

    When could bullying mean an employee has been forced to resign?

    Three recent decisions have considered whether an employee has been "forced" to resign in circumstances of bullying conduct. 

    While it was held that the employees in each of these cases were not dismissed by the employer, they serve as a reminder for all employers to ensure appropriate and accessible complaints processes are in place and that actions are taken to deal with bullying.  Managers should also receive adequate training on handling complaints, and appropriate workplace behaviours, particularly bullying and discrimination.

    Hawkins v LR Florist Pty Ltd [2023] FWC 896

    In this case, the employee alleged that she had been forced to resign after receiving "toxic" communications from her manager, with the "tipping point" being communications exchanged on 21 October 2022.  The employee resigned 3 weeks after this date and worked a 4 week notice period, claiming to have delayed her resignation because she had introduced a new part time employee to the business and wished to ensure the new employee was secure in their position before leaving. 

    While accepting the employee was very unhappy in her employment, the Commission found that the resignation was relatively considered and on its face disclosed no duress, but rather that the employee was open to discussing further work.  The Commission considered that the conduct complained of did not single out the employee and could not be seen as being undertaken with the intention of causing the employee to resign, even if that was the result.  Persuasive evidence was not given that continuing employment was not a real or effective option available.

    The Commission considered that there were avenues available to the employee to address what she considered to be bullying behaviour, including meeting with the manager, raising a complaint (formally or informally), or seeking a stop bullying order in the Commission.  This meant the employee had other real options as alternatives to resigning. 

    Noble v Smiling Samoyed Pty Ltd [2023] FWC 941

    The employee had been the target of an unprovoked incident of workplace bullying by a co-worker and claimed she was forced to resign because the employer had not taken satisfactory steps to ensure her health, safety and wellbeing at work which had caused her to lose trust and confidence in it.  The employer denied this, contending it had taken reasonable steps to deal with the conduct.

    The Commission was not satisfied that the employer engaged in conduct intended to bring the employment to an end, as it valued the employee, had made work accommodations despite the employee's health issues and had told the employee on the morning of the resignation that it did not want the employee to resign. 

    While the Commission expressed some empathy for the situation faced by the employee – and accepted that she had taken the decision to resign reasonably and doing what she thought best for her health and safety, the Commission found that the employee was not left with no real choice to resign.  It considered that she could have instead used conflict resolution processes, tried a temporary separation process recommended by the employer, or taken leave while the conflict resolution process was underway.  A psychologist's report stating that the resignation had been forced by the employer was found to be far from determinative, and one not fully informed of the complete workplace narrative. 

    Riley v Mills Hotels Pty Ltd [2023] FWC 856

    The employee claimed to have been forced to resign after lack of management action to protect her from targeted bullying by her Duty Managers at a hotel at which she was working.  While the Commission found that the Duty Managers did, on occasion, raise their voices, swear, disparage the employee's work ethic, and engage in abrasive conduct, these actions were not found to be so significant as to force the employee to resign. 

    The Commission also considered that while the employee resigned at a meeting called by the employer, she had considered resignation in the days leading up to it, amongst other possible outcomes.  The Commission found that the meeting had been held by the employer to obtain more information to determine how to handle the situation – and not to force a resignation.  Indeed, the employer expressed disappointment at the resignation in circumstances where it did not have time or resources to find and train a new staff member for the upcoming busy holiday season. 

    Lessons for employers

    While in each of the cases above, the Commission was satisfied that the employee was not forced to resign, this was in circumstances where the employer had taken steps to act on the bullying or other conduct towards the employee.

    In light of the obligations of employers to ensure the psychosocial health and safety of employees under work health and safety laws, and other obligations under employment and discrimination laws to protect employees from bullying and harassment, it is important that employers take active steps to ensure:

    • employees receive training on appropriate workplace conduct, and that responsible managers are trained in dealing with that conduct; and
    • they have processes in place to report and manage inappropriate conduct, including bullying and harassment.

    Employees will, of course, make their own choices in circumstances of perceived bullying and harassment.  This may be because they are dissatisfied with the steps being taken, the timing of those steps, or simply because they perceive that resigning is in their best interests.  Those matters may not mean there is a constructive dismissal – because the actions or omissions of the employer have not forced the resignation.  

    Having robust processes in place to ensure bullying conduct is reported and appropriately acted upon, will assist employers in demonstrating that they have acted reasonably and appropriately and not forced a resignation.

    Authors: Trent Sebbens, Partner; Kiana Hunter, Lawyer and Georgia Chahoud, Lawyer.

    The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
    Readers should take legal advice before applying it to specific issues or transactions.

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