Blamed for company's poor performance? Sales head resigns over mental health decline

The Fair Work Commission (FWC) recently dealt with a case involving a worker who claimed he was unfairly dismissed from his role as a sales representative at a distillery company.

The case centred on whether the worker's resignation was voluntary or if he was forced to resign due to the employer's conduct.

This case highlights the complexities surrounding resignations and dismissals in employment law. It underscores the importance of clear communication and documentation when an employee resigns, especially if there are concerns about their mental state or if the resignation occurs during a heated moment.

Background of the case

The worker began his employment with the distillery company in May 2022 as a full-time sales representative. Over the course of his employment, there were several discussions about his sales performance and the company's financial situation.

In the months leading up to December 2023, there was increased pressure on the worker regarding sales targets and revenue. The employer sent multiple emails expressing concerns about declining sales figures and requesting detailed sales plans.

For instance, in September 2023, the managing director sent an email stating, "In 2024, the overall sales figures must increase dramatically."

On 17 November 2023, the worker visited a general practitioner, presenting symptoms of stress, low energy, and panic attacks. The doctor's notes indicated that the worker was "feeling stressed out" and "dreads going to work."

The events of 5 December 2023

On 5 December 2023, a staff meeting was held to discuss the company's financial situation.

This was followed by a smaller meeting between the worker and the managing director. The content and tone of these meetings were disputed by the parties.

After these meetings, the worker sent an email resigning from his position. The email stated, "Today we reached a mutually agreed outcome. I would resign from my position as your Head of Sales. My final day has been agreed upon as December 22, 2023."

The worker's arguments

The worker claimed he was dismissed in contravention of the Fair Work Act. He argued that his resignation was either:

• Made in the "heat of the moment" while he was in a state of emotional distress, or
• Forced by the employer's conduct, amounting to a constructive dismissal.

The worker stated that he had been under significant stress and had sought medical attention for anxiety related to work pressures. He also claimed that during the meetings on 5 December, he was blamed for the company's poor performance and felt targeted.

The worker argued that the employer had engaged in a course of conduct that left him with no choice but to resign. This included allegations of unrealistic sales expectations, unpaid overtime, and intrusions into his personal time.

The employer's defence

The employer said that the worker had voluntarily resigned and was not dismissed. They argued that:

• The worker had previously attempted to resign on two occasions in August and September 2023 but had been persuaded to stay.
• The staff meeting was not an attack on the worker but a general discussion about the company's financial situation.
• The worker had offered to resign during the smaller meeting, and this was not requested by the employer.

The employer provided witness statements from other employees present at the staff meeting to support their version of events.

They also argued that the worker had been contemplating resignation for some time, as evidenced by discussions with colleagues.

Resignation due to work pressure?

The FWC examined the evidence presented by both parties. Some key points from the decision include:

"I find that although he was suffering stress and anxiety as a result of the pressure he was experiencing at work, the mental anguish was not at such a level that his resignation cannot be regarded as genuine."

This finding suggests that while the worker was under stress, it was not severe enough to render his resignation involuntary.

"The evidence of the previous attempts and his dialogue with [other staff] was contemplating resigning for some time. As this evidence infers that he had contemplated (and had tried) resignation before the 5 December 2023, the written resignation cannot be said to have been made in the heat of the moment."

The Commission considered the worker's previous attempts to resign and discussions with colleagues as evidence that the resignation was not a spontaneous decision.

The FWC also examined the worker's claims about changes to his employment conditions, such as alterations to his car allowance and expectations about working hours.

However, the Commission found that these issues, while potentially giving rise to other claims, did not amount to a forced resignation.

Dismissed at the employer’s initiative?

Ultimately, the FWC concluded that the worker was not dismissed within the meaning of the Fair Work Act. The Commission found:

"I therefore find that [the employer] did not engage in conduct with the intention of bringing the employment to an end. I do not consider there was a dismissal within the meaning of s 386(1)(b)."

"The circumstances of his resignation did not amount to a heat of the moment resignation under s 386(1)(a). The circumstances of the resignation did not amount to a 'forced resignation' under s 386(1)(b)," the FWC added. Consequently, it dismissed his application.

This case serves as a reminder for employers and HR professionals about the importance of handling resignations carefully, especially when an employee may be under stress. It also the need for clear documentation of performance discussions and any attempts by an employee to resign.

For employees, it underscores the importance of carefully considering decisions to resign and ensuring that any concerns about workplace conduct are clearly communicated and documented.