Employee says workplace harassment left her no choice but to quit with settlement package
The Fair Work Commission (FWC) recently dealt with an employment dispute involving allegations of constructive dismissal, where a worker claimed she was forced to resign due to workplace bullying and harassment. The case arose after the employer initiated performance management procedures and subsequently issued a show cause letter regarding conduct breaches.
The worker argued she had been subjected to bullying and harassment since July 2024, claiming this conduct created an environment where she had no choice but to resign.
She maintained that her departure was not voluntary but rather the result of her employer's behaviour, which included alleged verbal and emotional abuse, exclusion from meetings, and failure to address her grievances.
However, the employer disputed these claims, arguing that the worker had voluntarily resigned during ongoing disciplinary proceedings. The employer pointed to the fact that the resignation was negotiated through union representatives and involved a separation agreement with financial compensation, suggesting the departure was strategic rather than forced.
Performance management triggers workplace dispute
The employment relationship started in August 2023 when the worker began as a project manager with a Tasmania-based company. By February 2025, the employer initiated performance management procedures.
The worker's psychological state deteriorated significantly, with professional consultation revealing anxiety, low mood, hypervigilance, disrupted sleep, and decreased concentration.
The worker consulted a psychologist on 18 March 2025, who documented that she attributed these symptoms to "bullying and harassment" in the workplace. However, the FWC noted that no formal complaint about alleged bullying had been made to the employer at this time. This timing became crucial in the FWC's later analysis.
On 21 March 2025, the employer raised concerns about the worker's conduct following complaints from three other employees about her behaviour. The worker responded on 31 March 2025, simultaneously raising her own concerns about colleagues and business processes. She engaged external legal representation on 19 April 2025, and the Australian Services Union became involved on 28 April 2025.
Show cause letter initiates resignation negotiations
On 6 May 2025, the employer issued a show cause letter after being unable to reach the worker by phone. The letter detailed findings that she had breached the employer's Code of Conduct and stated: "[The employer] is considering terminating your employment and is providing you with an opportunity to show cause and respond as to why your employment should not be terminated."
The show cause letter asked her to "show cause as to why you should not have your employment terminated" and to "present any further information in response to the potential disciplinary outcomes." The worker was given until close of business on 8 May 2025 to provide her written response by email.
Rather than respond, the worker's union representative contacted the employer on 7 May 2025, indicating that the worker was experiencing stress and would like to negotiate a resignation. The union representative proposed a separation agreement with six months' pay. After negotiations, the parties agreed on eight weeks' pay with a deed of release.
Separation agreement finalises employment termination
The separation agreement was finalised on 9 May 2025, when the worker attended the worksite to sign the document and return company property. She also submitted a resignation letter described as both "irrevocable" and "absolute," detailing various workplace issues including alleged verbal and emotional abuse, exclusion from meetings, privacy breaches, and lack of responses to her grievances.
The union organiser confirmed that day that the worker "has advised that matters relating to the separation are now finalised," and the employer paid the settlement sum.
The evidence showed the worker had engaged in detailed negotiations, requested time to consider offers, and communicated about separate issues like sick leave, demonstrating her capacity throughout the process.
The worker maintained representation from both her union and external legal counsel, indicating she had access to professional advice about her rights and options during the negotiation process.
Legal principles govern forced resignation claims
The FWC applied established legal principles regarding constructive dismissal under section 386 of the Fair Work Act 2009. This section defines dismissal as occurring when someone "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 FWC found insufficient evidence to support the worker's claims of bullying since July 2024. The FWC observed that the worker had not made any complaint to her employer about alleged bullying until it was raised in response to the disciplinary procedure.
The FWC stated: "Even if there was bullying behaviour directed at [the worker], [the worker] had choices to make complaints about that behaviour to [the employer] and ask that they be addressed."
The Commission distinguished this case from situations where employers give employees the choice to resign or be dismissed. Instead, the evidence showed that the employer was clear no final decision had been made and the worker had an opportunity to show cause and provide further information.
Commission rejects constructive dismissal application
The FWC ultimately found that the worker was not dismissed within the meaning of section 386 of the Fair Work Act. The decision stated: "For the reasons stated above I am not satisfied that there was a termination at the initiative of [the employer], nor am I satisfied that [the worker] was forced to resign because of conduct, or a course of conduct engaged in by [the employer]."
The FWC emphasised: "[The worker] chose not to take that opportunity and made a strategic decision to resign before the conclusion of the process. Her resignation was her choice to make. There is no evidence she was forced to do so because of the conduct of her employer."
The FWC concluded: "The jurisdictional objection is upheld, and the application is dismissed," noting that the separation agreement "acts as a bar to further proceedings."
This outcome means the worker cannot pursue an unfair dismissal claim while the separation agreement remains in force, highlighting how negotiated departures with financial settlements can prevent future legal challenges.
