Resignation dispute emerges over whether employer conduct forced worker to quit his job
The Fair Work Commission (FWC) recently dealt with an unfair dismissal application where the employer objected on the basis that no dismissal had occurred. The employer argued that the worker had voluntarily resigned from his employment rather than being dismissed, and therefore the Commission lacked jurisdiction to hear the unfair dismissal claim.
The worker argued that his employer had repudiated his contract of employment through a course of conduct that made his position intolerable, leaving him with no alternative but to resign. He claimed this included removing his fuel card, suggesting he look for other work, implementing an unfair performance improvement plan, and subjecting him to bullying behaviour from management.
The case examined the distinction between voluntary resignation and constructive dismissal, particularly where an employee resigns due to employer conduct. The decision demonstrates the high threshold required to establish that resignation amounts to dismissal at the employer's initiative.
The worker had commenced employment with the construction company in September 2023 in the position of office and accounts administrator. In December 2023, the worker was offered an alternative position elsewhere, but following this external offer, it was agreed that he would transition into a new role that allowed him to be involved in estimating work along with a salary increase. This transition took effect in April 2024.
The worker alleged that problems began after he raised concerns with head office about some accounts for work being completed at a director's private residence. He claimed that from April onwards, the director engaged in a pattern of behaviour that included making negative remarks about his work, directing him not to attend weekly construction meetings he had previously attended, and sending emails pushing him to apply for other work.
The employer's position was different, with the director stating he was initially impressed with the worker's performance and had been motivated to retain him when the external opportunity arose in December 2023. However, after the worker commenced his revised position as construction administrator in April 2024, concerns arose about his performance and suitability for the role.
The director provided examples of performance concerns including the worker's inability to project manage the introduction of "site book" (an online site safety management tool), project managing office renovation, not completing tasks to a satisfactory standard, failure to maintain the office, and a lack of interest in the role.
The employer implemented a Performance Improvement Plan (PIP) in April 2024, citing concerns about the worker's performance not meeting required standards and doubts about his ability to fulfil position requirements. The director outlined that despite providing assistance and information to help progress projects, no notable progress was made by the worker.
A specific incident involved the worker being allocated a vandalism rectification project to complete within two weeks for a client. After two weeks, the worker informed the director that the project was complete and that he had attended the site. However, the client subsequently contacted the director to inform him the job had not been completed properly. When the director attended the site, he agreed the condition was not satisfactory and later discovered the worker had never attended the site or sought supervisor assistance.
Following this incident, the director commenced informal discussions with the worker regarding his underperformance and apparent lack of interest in his role. During these discussions, the worker informed the director he was looking for other work and attending interviews, to which the director offered his support.
The worker alleged that the director's conduct included putting him on a PIP focused on implementation of the Sitebook program which was not part of his position, having another employee follow up on all his work when no one else in the office was under scrutiny, and yelling at him in front of other employees because a tradesperson had parked in the director's parking space.
On 2 July 2024, the worker was issued with a written warning as his performance had not improved during the PIP process. The worker was then ill with COVID-19 from 2 July 2024 until 8 July 2024, when he resigned from his employment. The worker alleged that the removal of his fuel card worth around $60 per week without consultation, combined with being encouraged to find alternative employment, constituted repudiation of his contract.
The worker also claimed he requested leave in lieu of overtime to attend a relative's funeral and this was declined, causing him to take leave without pay. He outlined that the director's conduct had an adverse impact on his physical and mental health, which resulted in him having no alternative but to resign from his employment.
The employer confirmed they offered the worker the opportunity to withdraw his resignation while they investigated the concerns outlined in his resignation letter, specifically the issuance of a written warning and that he had been encouraged to find alternative employment. The worker rejected this offer and as a result, the employer accepted his resignation on 10 July 2024.
The FWC noted that the worker did not contend that his resignation occurred in the heat of the moment, and that the employer had provided him with the opportunity to withdraw his resignation and investigate the allegations made. The Commission found: "I am satisfied that [the worker] did not resign in the heat of the moment."
The FWC examined the worker's claims about contract repudiation, particularly regarding the fuel card removal. The Commission found: "The parties are in dispute in relation to the entitlement to the use of the fuel card. [The worker] submitted it was agreed verbally in December 2023, however, was then not included in his revised contract of employment in April 2024. On the evidence before the Commission, there is no evidence that suggests this was ever a contractual entitlement in writing."
The Commission reviewed the PIP and found some elements were unfair to the worker. The FWC stated: "From the evidence of [the worker] it is clear that the matter in relation to the gear box involved multiple stakeholders and the lack of communication between [the director] and [another director] left [the worker] in a situation whereby he was left trying to ensure he had the adequate authorisation for the work to be completed."
The Commission found: "The poor communication between management is not something [the worker] could reasonably be held responsible for." However, the FWC concluded: "I am not satisfied that this situation created an environment whereby there was no alternative for [the worker] but to resign."
The worker made allegations of bullying and retaliation, but the Commission found: "There is no substantive evidence before the Commission that [the director] commenced some form of campaign against [the worker] in retaliation for raising these concerns."
The FWC applied established legal principles about the distinction between voluntary resignation and constructive dismissal. The Commission cited relevant case law stating: "Often it will only be a narrow line that distinguishes conduct that leaves an employee no real choice but to resign employment, from conduct that cannot be held to cause a resultant resignation to be a termination at the initiative of the employer."
The Commission found: "There is no substantive evidence that suggests [the employer] undertook a course of conduct that left [the worker] with no alternative but to resign from his employment. I accept the evidence of [the director] that there were legitimate concerns around the general performance of [the worker] and that his performance needed to improve."
The FWC concluded: "Despite the deficiencies noted above, I am not satisfied that [the employer's] conduct (or course of conduct) resulted in [the worker] having no other option than to resign or that it would have that probable effect."
The Commission determined: "Upon assessment of all the evidence before me, in the circumstances of this matter, I am inclined to conclude that [the worker's] resignation was voluntary." The FWC added: "It is my conclusion that [the worker] made the understandable decision to seek employment elsewhere as his employment at [the employer] had turned sour."
The final determination was: "Having concluded that [the worker] was not dismissed by [the employer] as defined in the Act, [the worker's] application for an unfair dismissal remedy is therefore dismissed." The Commission found that the worker's resignation was voluntary rather than constituting dismissal at the employer's initiative.
