Did performance review lead to forced resignation?

The Fair Work Commission (FWC) recently dealt with a case where a worker claimed he was forced to resign after an unexpected meeting with his manager.

The worker argued he was given an ultimatum: resign voluntarily or face what was described as a "hard and messy situation."

At the heart of this case lay questions about the nature of resignation and what constitutes genuine choice in employment decisions.

The worker maintained he had no real choice but to resign, while his employer presented evidence of ongoing performance management processes.

Workplace performance management leads to exit

The worker started his role on 29 January 2024. From the beginning, his manager raised concerns about his performance and provided regular feedback through daily sales reports and weekly Friday meetings. The garage door manufacturing company maintained detailed records of sales targets and achievements.

Performance data showed the worker only achieved his monthly budget targets in February and April 2024. By August 2024, he was achieving 53% of his budget targets. Weekly performance discussions took place between the worker and his manager, including conversations about career progression.

When the worker expressed interest in a sales coordinator position, his manager decided he lacked the necessary skills and experience. Throughout August 2024, the employer sent several emails about sales performance. One email dated 27 August 2024 showed the worker had issued 11 quotes that week, falling short of the minimum target of 25 quotes per week.

Performance discussion triggers exit claims

On 30 August 2024, an unplanned meeting took place that led to different interpretations from both parties. The worker stated he was caught off guard and pressured to resign. According to his account shared with the FWC:

"[The manager] informed me that both he and the business no longer saw me as part of their future plans... implying that I could either choose to resign or face a 'hard and messy' situation."

The manager strongly disagreed with this characterisation, telling the FWC that the meeting was intended to discuss performance concerns. He stated: "[A]t absolutely no point during our 1:1 meeting on Friday 30th August did I say that [the worker's] employment had come to an end, as we had just finished our weekly Sales Team meeting and I advised [the worker] that I'll be reviewing his final August Result in further detail with him on Monday 2nd September."

Within hours of this meeting, the worker sent his resignation by email.

Is the resignation considered a dismissal?

The FWC examined section 386 of the Fair Work Act 2009, which defines when a resignation might be considered a dismissal. This includes situations where a worker "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."

The Commission referred to a significant previous case (Bupa Aged Care Australia Pty Ltd v Shahin Tavassoli) that set out the test for forced resignation: "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 worker] had no effective or real choice but to resign."

This legal framework required the Commission to examine whether the employer's conduct was intended to end the employment relationship or if it was part of legitimate performance management.

Performance improvement vs. forced termination

Looking at the evidence, the FWC found the employer's actions pointed to performance improvement rather than forced termination. The Commission stated: "What must be shown is that the conduct of [the employer] was intended to bring the employment to an end. I do not consider the conduct of [the employer] throughout [the worker's] employment in general, or during the month of August 2024 in particular, was conduct intended to bring [the worker's] employment to an end."

The employer's documented history of performance discussions and future plans for improvement supported this finding. As the Commission noted: "[The employer] had the intention of placing [the worker] on a performance plan and continuing ongoing employment with him. [The employer] engaged in no conduct with the intention of bringing the employment to an end."

The Commission ultimately found no evidence of forced resignation, making the worker ineligible for protections under the Fair Work Act's general protections provisions. This decision reinforced the distinction between legitimate performance management and conduct that might force a resignation.