Can management conduct create conditions that force employees to quit their jobs?
The Fair Work Commission (FWC) recently dealt with a case involving a worker who claimed he was dismissed after resigning from his position as a retail salesperson. The worker argued that his resignation was forced due to conduct by his area manager that created an intolerable work environment.
The worker contended that his area manager's conduct had "effectively forced" him to resign, claiming he had "no reasonable choice but to leave" due to an uncomfortable and difficult work environment.
The employer objected on jurisdictional grounds, arguing the worker was not dismissed as required under the Fair Work Act 2009, but had voluntarily resigned.
This case highlights the distinction between voluntary resignation and constructive dismissal, examining when workplace conduct may force an employee to resign and whether such resignation constitutes dismissal under Australian employment law.
The worker started employment with a national retailer of bedroom products on 20 November 2024 at a newly opened store in Springvale, Victoria. The employer operates multiple retail stores selling beds and mattresses across Australia.
At the start of his employment, a store manager oversaw daily operations while an area manager was responsible for multiple locations including the Springvale store.
The worker was described as very focused on making sales and was a capable salesperson, evidently effective in communicating with customers and closing sales. However, his keen focus on sales also contributed to some conflict with other staff at the store.
A probation performance review dated 20 February 2025 by his store manager recorded that while the worker was "good in communicating with customers & closing sales," he "gets little bit hyper when he thinks other staff member making sales or taking his sales" and needed to "work on his work ethics and attitude towards fellow colleagues."
The worker relied on three alleged circumstances involving conversations with the area manager that he claimed forced him to resign on 14 March 2025. The FWC noted that where there was conflict between the evidence of the worker and the area manager, it tended to prefer the area manager's evidence, finding him to be a credible witness whose evidence was generally clear, while the worker was prone to exaggerate about his interactions with management.
The first alleged circumstance related to a complaint the worker made to the area manager about his store manager in early January 2025. The worker complained that the store manager had taken clients he had initially served and then claimed the sales under her name. The worker claimed the area manager immediately dismissed his complaints based on his trust in the store manager.
During oral evidence, the worker agreed that during this conversation, the area manager spoke to him in a calm manner and suggested that he should learn to more quickly operate the point of sale system so that other staff were not able to engage with new customers while he was delayed completing transactions.
The area manager's evidence was that he told the worker that the store manager was experienced and capable of sorting the issues out, speaking in a normal tone and not dismissing the complaint outright.
The second alleged circumstance involved a complaint about a new casual salesperson employed sometime in January 2025. The worker believed the casual salesperson would immediately approach customers and reduce his opportunity to make sales.
The worker's evidence was that after the area manager learned of his complaint, the area manager warned him that this could not continue and arbitrarily accused him of provoking the situation.
However, the area manager denied having a direct conversation with the worker about the casual salesperson, stating he may have spoken with the store manager about the complaint but denied speaking directly to the worker about the matter.
The third alleged circumstance related to an incident on 10 March 2025, being Labour Day in Victoria. The worker was working at the store on this public holiday, which he said was very busy with many customers.
His evidence was that whilst working, he was interrupted multiple times by another employee about an invoice sent to a customer to whom he had made a sale on a previous day.
The worker gave evidence that he phoned the customer, who informed him she was upset about a phone call she had received from the other employee. The worker said that after finishing his telephone call to the customer, he spoke to the other employee and told her he would complain about her "misconduct" to the area manager. The worker alleged the other employee then went to the warehouse and telephoned the area manager making false accusations against him.
The worker claimed the area manager then telephoned him and "chastised him very loudly and blamed him for not getting along with colleagues." He said he was stunned by the area manager's comments and felt totally helpless.
The area manager's evidence was that he received a phone call from the distressed employee complaining about the worker's behaviour, then phoned the worker telling him the employee was very upset.
The area manager said the worker used inappropriate language to describe a co-worker and asked whether the former wished him to resign, to which he responded that he did not wish him to resign and wanted him to reflect on his behaviour towards co-workers.
The worker gave evidence that after his conversation with the area manager on 10 March 2025, he had "several days of contemplating" including consideration of his health and wellbeing, before giving his resignation. On 14 March 2025, the worker sent an email entitled "A letter of resignation" providing one week's notice in accordance with his employment contract.
The area manager acknowledged and accepted the resignation the same day. The worker worked out the one week notice period and his employment ceased on 21 March 2025.
The HR manager gave evidence that the worker contacted her on 19 March 2025 to inquire whether he would receive his sales commission up to the date of his departure and that no other issues were raised regarding his employment during this interaction.
The worker subsequently filed a general protections application under section 365 of the Fair Work Act 2009, claiming he had been dismissed. The employer filed a jurisdictional objection arguing that the worker was not dismissed as required by the Act but had voluntarily resigned.
The FWC considered whether the worker was dismissed under section 386 of the Fair Work Act 2009, which defines dismissal as either termination at the employer's initiative or resignation forced by employer conduct.
For a forced resignation, the test requires that "[the employer] engaged in the conduct with the intention of bringing the employment to an end or whether termination of the employment was the probably result of [the employer's] conduct such that the employee had no effective or real choice but to resign."
The FWC found no proper basis to conclude that the employer through the area manager engaged in conduct with the intention of bringing the employment to an end or that termination was the probable result of the area manager's conduct.
The Commission noted that the area manager had counselled the store manager to be patient with the worker and specifically told the worker on 10 March 2025 that he did not want him to resign.
The FWC also considered whether the resignation was given "in the heat of the moment" or in emotional stress such that the worker could not reasonably be understood to be conveying a real intention to resign.
The Commission found this was clearly not the case, noting the worker gave his resignation after "several days of contemplating" and four days after the most recent incident.
The FWC found that the area manager's conduct in the three alleged circumstances was reasonable. Regarding the first conversation, the Commission found it was "entirely reasonable" for the area manager to express confidence in the store manager's ability to resolve issues, noting he had made practical suggestions to help the worker improve his availability to deal with customers.
For the second alleged circumstance, the FWC was not satisfied that the area manager spoke directly with the worker about the casual salesperson complaint, noting the area manager denied the conversation occurred and there was no contemporaneous record of it.
Regarding the third incident, the Commission found the area manager's phone conversation with the worker was reasonable given he had received a complaint from a distressed employee.
The FWC concluded: "I find that [the area manager's] conduct did not force [the worker's] resignation." The Commission found the worker was not dismissed within the meaning of the Fair Work Act 2009. The FWC stated:
"Nothing in these circumstances constitutes a heat of the moment resignation or one given in a state of emotional stress or confusion such that [the worker] could not be reasonably understood by [the employer] to be conveying a real intention to resign." The worker's general protections application was dismissed for want of jurisdiction.
