Principled resignation or voluntary exit? FWC draws the line
The Fair Work Commission (FWC) recently dealt with a case involving a senior investment advisor who resigned from his position and later claimed he was constructively dismissed.
The worker alleged that he was forced to resign due to what he believed were unethical directives from his employer regarding how to market financial products to clients.
The worker argued that these directives would have required him to mislead clients about investment returns on certain financial products. He claimed that raising concerns about these practices led to a hostile workplace environment that ultimately left him with no choice but to resign from his position.
The case hinged on whether the worker truly had "no effective or real choice but to resign" as defined in employment law, or whether he resigned voluntarily.
The worker started employment as a senior investment advisor at an Australian bond exchange company in June 2024 after previously working as a contractor.
The company was described in the decision as "a marketplace for investing in fixed-income securities" that provides financial institutions, funds, and individuals with access to bonds and other securities.
The dispute centred on how Tier 2 bank bonds should be marketed to customers. The worker believed he was being directed to emphasise Yield to Maturity (YTM) rather than Yield to Call (YTC) when discussing these bonds with clients, which he felt was potentially misleading.
On 23 January 2025, the Managing Director of Strategic Alliances circulated an email stating: "[The CEO] has reiterated we that we should talk Yield to Maturity, as the banks do not have to make the call." The worker interpreted this as a directive to present information in a way that could mislead clients about potential investment returns.
The worker and the Managing Director of Strategic Alliances met on 31 January 2025 to discuss their differences. Their accounts of this meeting differed significantly. The worker claimed he raised objections about the quoting practices and the workplace environment, while the managing director recalled a conversation about the worker being unhappy with various aspects of the job.
On 3 February 2025, the worker sent a text message to a colleague saying some things were said "which I simply can't accept" and "So I've had to make the regrettable decision to move on." Later that day, he emailed his resignation to the Chief Executive Officer, stating: "Regrettably I've taken the difficult decision to resign from my position."
Evidence showed that the worker had been in discussions with another investment firm, River X, during the latter half of 2024. After resigning, the worker contacted several clients using an email address from the River X domain, suggesting he had arranged alternative employment before resigning.
In determining whether this was a dismissal, the FWC applied the test from the Full Bench decision in Bupa Aged Care Australia Pty Ltd v. Tavassoli, which examines whether "termination of the employment was the probable result of the employer's conduct such that the employee had no effective or real choice but to resign."
The Commissioner found that despite the worker's strong views about the quoting practice, "his concern however did not raise to a complaint that he was being asked to do something unethical or unlawful." No written complaint was made about being asked to do anything improper.
The employer had mechanisms for such complaints, including a whistleblower policy and access to the firm's general counsel responsible for governance issues. The worker acknowledged he did not use these options.
The Commissioner concluded that the employer's conduct did not force the worker to resign: "The question here is whether [the worker] faced with an instruction that he disagreed with had no effective or real choice but to resign. I find that the circumstances did not leave [the worker] in that position."
The decision explained: "[The worker] had other options available to him. Those options included informing [the employer], in writing, his objections to the instructions and the reasons for them... As his complaint involved suggestions the firm may have been acting unethically or unlawfully, a whistleblower complaint could have been made in accordance with [the employer's] policy."
The Commissioner acknowledged the worker's strong views but noted: "I have no doubt that [the worker] holds a strong view that clients should be quoted on the YTC basis. He spent must time in the proceedings trying to convince me that his view was correct. That question however is not the issue that I have to determine in this case."
The application was dismissed, with the Commissioner concluding: "As I find [the worker] was not forced to resign, I find he was not dismissed within the meaning of s. 386 of the Act. As there was no dismissal, I uphold [the employer's] jurisdictional objection."
This case demonstrates that disagreeing with management decisions, even when based on ethical concerns, does not constitute a forced resignation when formal complaint mechanisms remain available but unused.
Additionally, for a constructive dismissal claim to succeed under section 386(1)(b) of the Fair Work Act 2009, workers must show they truly had no other option but to resign.
