When does pressure at work legally count as constructive dismissal?
The Fair Work Commission (FWC) recently dealt with a case where a compliance manager claimed he was forced to resign after experiencing what he described as bullying and unreasonable management practices at his workplace between January and May 2024.
The worker had started in September 2023 and provided one month's notice of resignation in May 2024. He raised several issues with workplace conduct, including what he viewed as threatening warnings about hiring processes, pressure to sign new employment documents, and alleged aggressive behaviour from a newly appointed consultant.
The case put a spotlight on when an employee's resignation might be considered forced under the Fair Work Act 2009. The worker lodged a workers' compensation claim during his notice period, which was later accepted by the insurer.
The compliance manager started his role in September 2023 with pre-existing health conditions that required regular six-monthly medical assessments. In January 2024, he took three weeks of personal leave.
During his absences, the Chief Executive Officer (CEO) and other managers made home visits to discuss his return to work.
In March 2024, a workplace incident occurred when a casual employee, whom the compliance manager had hired, was injured while using an oxy torch without proper training.
Management responded by issuing a circular to all managers about proper hiring processes. While the employer maintained this was guidance, the worker viewed it as a warning.
The Commission's decision noted: "The circular makes it clear that it follows evidence of an employee hired without being provided with training in the use of an oxy cutter... Three employees were required to sign this memo acknowledging that they have read and understood the outlined process."
Tensions increased in April 2024 when management presented new employment documentation. The worker claimed the human resources manager told him to sign or face termination, though this was later followed by an apology. The employer denied making any such threat.
In May 2024, a new consultant joined as a board advisor. According to the worker's evidence, the consultant displayed aggressive behaviour in sales meetings and made statements about terminating underperforming staff. The worker stated he "saw where this was heading."
On May 22, 2024, the worker emailed management stating: "I will be tendering my resignation Monday morning for a number of reasons... I will outline my reasoning for departure in writing for avoidance of doubt."
According to the FWC, the Fair Work Act sets out specific criteria for constructive dismissal under section 386(1)(b), which states that a person has been dismissed if they resigned but were forced to do so because of their employer's conduct.
The FWC applied principles from previous cases, particularly Mohazab v Dick Smith Electronics Pty Ltd (No 2), which established that a critical factor is whether "had the employer not taken the action it did, the employee would have remained in the employment relationship."
The FWC found that while management practices could have been better, they didn't amount to forced resignation. The decision stated: "Management action is still reasonable management action even if it could have been undertaken in a manner that was 'more reasonable' or 'more acceptable'."
The Commission found: "The wording of the resignation strongly supports a voluntary resignation, there is nothing in the language to suggest force or lack of choice." They further noted: "There was no evidence of any action taken by [the employer] to cause the resignation or to repudiate the contract of employment."
The case was dismissed as the worker couldn't establish he was constructively dismissed under the Fair Work Act.
