Commission finds employer's conduct was the principal factor in employment termination
The Fair Work Commission (FWC) recently upheld an unfair dismissal application involving a building designer who resigned after experiencing 16 consecutive weeks of late wage payments.
The worker argued he was forced to resign because of the employer's persistent failure to pay his weekly wages on time and the complete cessation of superannuation payments.
He maintained that the financial strain and breach of employment contract left him with no choice but to terminate his employment after multiple unsuccessful attempts to resolve the payment issues.
The employer contested the dismissal claim, arguing that the worker resigned voluntarily rather than being dismissed.
Chronic wage delays escalate financial strain
The employment relationship deteriorated significantly from July 2024 when systematic wage payment delays began affecting the building designer's financial stability.
Documentary evidence demonstrated that each weekly payment was consistently delivered between 7 to 20 days after the due date, creating ongoing uncertainty and financial hardship.
The employer informed staff on multiple occasions in March, April and August 2024 that cash flow had become an issue affecting business operations.
By September 2024, the worker became seriously concerned about the pattern of delays and sought advice from the Fair Work Ombudsman regarding his rights.
On 29 September 2024, the worker received a text message from management assuring him that his pay would be up to date by the end of the week and promising to focus on outstanding superannuation issues.
Despite these assurances, the promised payments failed to materialise, intensifying the worker's concerns about the company's financial viability.
Payment demands yield inadequate responses
On 9 October 2024, the worker sent an email requesting an update regarding his wages, which were 13 days overdue.
He subsequently received one payment, but two weeks of salary remained outstanding, demonstrating the inadequate nature of the employer's response.
The worker escalated his approach on 13 October 2024 by sending a formal demand letter requesting payment of outstanding wages within seven days.
The employer responded with an apology for continued payment delays, but resolution remained incomplete, with payments for outstanding weeks not received until 21 and 22 October 2024.
On 23 October 2024, the worker inquired about wages due that day, which had not been paid.
These wages were not received until 13 November 2024, demonstrating the continuing pattern of significant delays that made financial planning impossible.
Resignation follows complete payment breakdown
By 7 November 2024, the worker had not received wages for the previous week and two weeks prior, creating what he described as unnecessary stress and difficulty in managing basic expenses.
The cumulative effect of months of payment delays reached a breaking point where continued employment became financially unsustainable.
The worker submitted his resignation on 7 November 2024 with notice to 22 November 2024, explicitly stating the reason as the inability to work without being paid.
Management's response was reportedly minimal, with the director simply stating acceptance of the situation.
On 9 November 2024, the worker demanded payment of three weeks of wages that remained owing, explaining the stress and difficulty in managing personal expenses.
Although the employer indicated it would resolve payments by 13 November 2024, the outstanding amounts remained unpaid, leaving the worker four weeks behind in wages.
Employer fails to engage with legal proceedings
The employer's conduct during legal proceedings reflected the same lack of engagement demonstrated during the employment relationship.
Despite completing initial small business documentation claiming fewer than 15 employees and asserting the worker resigned rather than being dismissed, the company failed to file the required response documents.
The employer did not attend the scheduled hearing on 18 June 2025 despite acknowledging receipt of revised listing details and failed to respond to multiple contact attempts by the Commission through email and telephone calls.
This behaviour necessitated the hearing proceeding in the employer's absence.
The FWC found the employer's responses inadequate, with most questions answered as "not applicable" and providing only brief assertions that the employee resigned.
No evidence was presented to support claims of having fewer than 15 employees or compliance with fair dismissal procedures.
FWC: Is it constructive dismissal?
The Commission determined that persistent failure to pay wages constituted employer action that was the principal contributing factor in employment termination.
Applying established precedent, the tribunal found that despite the worker's formal resignation, the circumstances amounted to dismissal within employment legislation.
The decision emphasised that the employer's failure to pay wages was an action taken by the employer that directly resulted in employment termination.
This finding transformed what appeared to be voluntary resignation into constructive dismissal, enabling the worker to pursue unfair dismissal remedies.
The Commission rejected any suggestion that small business protections applied to the employer's conduct.
Even assuming small business status, neither summary dismissal nor procedural fairness requirements were met, as no valid reason existed for dismissal and no warnings were provided.
Compensation reflects limited future employment prospects
The Commission assessed compensation using established methodology, but acknowledged that the employer's ongoing financial difficulties would have limited future employment duration.
Evidence suggested cash flow problems remained unresolved, and the worker was still owed outstanding amounts, indicating employment would not have continued for extended periods.
The tribunal determined the worker would likely have remained employed for only two weeks beyond the actual dismissal date, given the unsustainable nature of working without payment.
This finding reflected a realistic assessment of how long employment could have continued given the employer's financial constraints.
Compensation was calculated at approximately $3,077 gross plus superannuation, representing two weeks of the worker's $80,000 annual salary.
No deductions were made for earnings during this period as the worker remained unemployed, and no contingency discounts were applied, given the brief timeframe involved.
